What GIs Need to Know About President Obama’s Budget Proposal

President Obama released his fiscal year 2014 budget, which outlines his blueprint for reducing the deficit by $1.8 trillion over the next decade as well as other funding priorities. The budget assumes the elimination of the $1.2 trillion in automatic sequestration spending cuts, but keeps in place the budget limits agreed to, as outlined in the Budget Control Act.

Assumes SGR Repeal
Of interest to health-care providers, the budget assumes that the sustainable growth rate (SGR) formula is repealed and replaced with a 0 percent update. The budget also states that physicians should be given a period of several years of stable payments while HHS develops new payment models that tie physician reimbursement updates to participation in quality improvement models that are ultimately based on quality and efficiency. Although this language is not binding, it demonstrates that the administration wants to continue to move toward a more value-based payment system that links payment to quality outcomes.

The language in the president’s budget is very similar to language being developed by Republicans on the House Ways and Means and Energy and Commerce Committee to reform the SGR. The committees have briefed AGA and the physician community on their proposal and have sought our input. AGA submitted comments to the committee recently in which we outlined our concerns and pointed to our development of quality improvement initiatives in gastroenterology with both Medicare and private payors.

Strengthens IPAB
The president’s budget includes language to strengthen the Independent Payment Advisory Board (IPAB), which the AGA has opposed since it was first announced since it will disproportionately impact physicians. The president lowered the target rate that triggers the IPAB to GDP + 0.5 percent. However, AGA continues to oppose IPAB and supports legislative efforts by Rep. Phil Roe, R-TN, and Sen. John Cornyn, R-TX, that would repeal the IPAB (H.R. 351/S.351).

Eliminates In-Office Ancillary Services for Some Services
The president’s budget includes language that would eliminate the in-office ancillary services exception for radiation oncology services, advanced imaging and physical therapy services since the administration states these services are rarely done on the same day. Physicians would have to meet certain accountability measures beginning in 2015 in order to perform these services.

AGA supports the current in-office ancillary services exception to the Stark self-referral laws, but is pleased that the language did not prohibit pathology services, which are integral to many GI practices. The General Accountability Office (GAO) is currently conducting a study on self-referral of pathology services. AGA had the opportunity to meet with the GAO to educate them on the importance of pathology in GI practices for quality improvement, coordinated care and more timely results.

Supports NIH Funding
The budget also includes a $471 million increase to NIH funding for a total budget of $31.3 billion. AGA is pleased that the administration recognizes the importance of NIH funding and we will continue to advocate for increases that reflect biomedical research inflation.

Like the congressional budget resolutions, the president’s budget is a non-binding blueprint that reflects the administration’s spending priorities. However, the president and Congress will once again need to negotiate on spending priorities as Congress begins its appropriations process.

Stay tuned for more updates on the legislative priorities of gastroenterology through the AGA Washington Insider and AGA eDigest.